A study has been conducted to determine if one of the departments in Barry Corporation should be discontinued The contribution margin in the department is $60,000 per year Fixed expenses charged to the department are $75,000 per year It is estimated that $34,000 of these fixed expenses could be eli...

A Decrease by 26000 per year Contribution margin 6000 ...

A study has been conducted to determine if one of the departments in Barry Corporation should be

Question:

A study has been conducted to determine if one of the departments in Barry should be discontinued. The in the department is $60,000 per year. Fixed expenses charged to the department are $75,000 per year. It is estimated that $34,000 of these fixed expenses could be eliminated if the department is discontinued. These data indicate that if the department is discontinued, the company's overall net operating income would:
A) Decrease by $26,000 per year
B) Increase by $26,000 per year
C) Decrease by $15,000 per year
D) Increase by $15,000 per year
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...